Good morning and welcome to the MoneyGram International Third Quarter 2012 Earnings Conference Call. Today's conference is being recorded. At this time, all participants have been placed in a listen-only-mode and the floor will be open for your questions following the presentation.

It is now my pleasure to turn the floor over to your host, Mr. Eric Dutcher, Vice President of Investor Relations. Please go ahead, sir.

I must remind you that today’s call is being recorded and that the various remarks we make about future expectations, plans and prospects constitute forward-looking statements for the purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from expectations, plans and prospects contemplated in any forward-looking statements as a result of various factors, including those discussed in our filings with the SEC. I encourage everyone on this call to read our SEC filings, including our 10-K for the year ended December 31, 2011, and our 10-Q for the quarter ended September 30th filed today.

Thanks Eric. Good morning everyone. There are a lot of great things to talk about this quarter related to our business results, not the least of which is our sixth consecutive quarter of money transfer constant currency revenue growth that was punctuated by our four-year high of 18% transaction growth in sends that originated outside the US. But before I get into these details, I would first like to address our legacy matter concerning the investigation before the US Attorney’s Office for the Middle District of Pennsylvania and the US Department of Justice.

As you have hopefully seen by now this morning we filed an 8K and a press release disclosing that we've reached this settlement with the MDPA and the US DOJ in connection with the investigation of transactions and certain of the company's agents as well as this fraud complaint data and consumer anti-fraud program for the period from as early as 2003 to early 2009. In connection with this settlement the company has entered into a five year deferred prosecution agreement known as the DPA. Under the terms of this DPA, no further action will be taken against MoneyGram by the MDPA or DOJ on these matters if we meet the conditions set forth in this agreement. There is an option for termination early based on successful remediation action.

The company has agreed to the appointment of an Independent Compliance Monitor and to pay the US Government $100 million, which will be available to victims of the consumer fraud scam perpetrated through certain agents. Since this is now resolved, we have increased our accrual related to this matter by $70 million, adding to our $30 million accrual that we made in the second quarter. Further terms of the agreement are described in the 8K we filed this morning.

In connection with the agreement, the company is continuing to cooperate with the US Government and we will be making additional enhancement to our compliance program. I’ve said this before, but bearish repeating, we take compliance extremely seriously at MoneyGram and nothing angers us more than when people attempt to use our service to engage in illegal activity.

The standards of the MoneyGram of today, would not have allowed the types of activities described in the DPA to occur. Since 2009, we have created a new culture at the company and we've taken numerous steps to enhance our global compliance in anti-fraud program. These actions include the addition of new management and significant investments and enhancements to staffing, to our processes and technology all geared toward preventing consumer fraud and ensuring we meet the highest levels of regulatory compliance.

During that time, we have invested more than $84 million in our compliance program. We remain fully committed to conducting our business with integrity and we remain vigilant in our efforts to partner with law enforcement and regulators to thwart illegal activity. I expect much work in the days to come to ensure that we have covered every aspect of the agreement and the requirements for complying with it. From our ongoing interaction with the FTC, we know what it takes to comply with directives from the government; I have every confidence that the MoneyGram team will not only meet the requirements of the government, but will surpass their expectations.

Now with that said, let’s turn back to our great operating performance in the quarter. Consumers continue to recognize MoneyGram’s compelling products and valuable services as evidenced by our money transfer constant currency growth of 11% on the strength of 13% transaction growth. We also made good progress on the turnaround of our bill payment business which generated strong adjusted margins and cash flow.

Please note that once you make your selection, it will apply to all future visits to NASDAQ.com.
If, at any time, you are interested in reverting to our default settings, please select Default Setting above.

If you have any questions or encounter any issues in changing your default settings, please email isfeedback@nasdaq.com.

Please confirm your selection:

You have selected to change your default setting for the Quote Search. This will now be your default target page;
unless you change your configuration again, or you delete your
cookies. Are you sure you want to change your settings?